By Janes Ouma Odongo
Africa is endowed with rich and diverse renewable and non-renewable natural resources, yet its people remain among the poorest in the world.
Africa’s environment is continuously being degraded. The region is increasingly experiencing desertification, climatic variability and extreme events such as floods and droughts. While the region is most vulnerable to the impacts of climate change, its capability to respond and adapt to its impacts is limited. The region’s forests, biodiversity, and coastal and marine environments are also under severe threat.
Africa is an important supplier of natural resources globally, and the extractive industry (oil, gas, minerals) plays a crucial role in many African economies. Accounting for more than 50 per cent of Africa’s export in the 1990s, the extractive industry constitutes Africa’s largest export category. Exploitation of Africa’s abundant mineral resources was a major motivation for colonization. It is still is a challenge to add value to the exploited resources so as to obtain significant revenues for domestic savings and investment.
In our view, Africa’s lack of investment in infrastructure, transport and industry since independence has played a role in the maintenance of this underdeveloped state. Our leaders have not taken any daring initiatives towards the expansion of industries, load, port networks as well as the availability or accessibility of several other commons that need to exist before realistic upward economic growth momentum can be experienced. Until recently, though this still persists in many African nations, our leaders have tended to focus more on impoverishing the citizens, acquiring more wealth, strengthening their own military prowess for the leaders rather than nation’s sake and ignoring calls for improving economic and human development of their nations. This can be attributed to the fact that most of them had experience of working under colonialist regimes which had no respect for human rights; especially for Africans, or having been guerillas with only lessons learnt being those on how to torture and make enemies to toe the line. How independence age leaders barely knew or even wanted to know a thing on the role of the state in achieving economic progression for the nation and her citizens. This was made more worse, as well, by their not having thought of their states as competitors in the global economy, they were merely contented with receiving aid and giving away precious natural resources of the continent in return.
This was made worse by the high illiteracy levels in many an African nation. It is only recently that Africans have started acknowledging their role in the global village thanks to the rise in literacy among Africans coupled with increased access to the global mass media and economic empowerment which has allowed people from the continent to interact more with the world.
Moving Towards Realizing the Millennium Development Goals
The overriding sustainable development challenge in Africa is poverty eradication. The “African Ministerial Statement to the World Summit on Sustainable Development (WSSD) identifies poverty eradication as an indispensable requirement for sustainable development. Africa is the only region in the world where poverty has increased both in absolute and relative terms, (ECA, Economic Commission for Africa; 2014).
Apart from being the poorest region in the world, Africa remains the least developed, the most technologically backward, the most indebted, the most food-insecure and the most marginalized. Furthermore, malnutrition, disease, environmental degradation, natural resource depletion, poor and inadequate infrastructure, unemployment and weak institutional capacities continue to pose serious development challenges for Africa.
This state of affairs is exacerbated by recurring natural disasters and the AIDS pandemic, which is reversing decades of economic gains and imposing costs on Africa at least, twice those in any other developing regions, thus undermining sustainable economic growth. It is striking that Africa is the only continent not on track to meet most of the Millennium Development Goals (MDGs) by 2015, (ECA; 2014).
Although North Africa as a whole and a small number if Sub Saharan Africa economies have the potential to reach the sub goal of reducing extreme poverty by half by 2015, the slow pace of progress in the majority of countries indicates that as a continent, Africa is unlikely to reach this goal, given current trends. The number of the poor in Africa has actually risen since the 1990s by over 90 million, while the average income of the poor has declined, indicating worsening income distribution within the countries. On the whole, the proportion of people living with insufficient food has declined by only 3 percentage points since 1990, while hunger still prevails. This is especially true for rural Africa (ECA; 2005a).
Taking our country as an example, Kenya’s poverty incidence rose from 52 per cent in 1982 to an estimated 56 per cent in 2004. During the same period, rural absolute poverty had increased from about 48 per cent to about 60 per cent with urban informal settlements and rural areas being more adversely affected. More seriously, the gap between the rich and the poor increased with poverty levels, standing at approximately 56 per cent of the population by 2003, up from 52% in 1994.
The interaction of the poor and the environment has resulted in undesirable consequences, which contribute to the worsening poverty situation in Kenya. As a result of poverty, the poor engage in activities such as poor farming practices, overgrazing, burning of trees to make charcoal and poor waste disposal, to mention but a few.
The Gini coefficient increased from 0.40 in 1982 to 0.49 in 1992. The Gini coefficient for 1992 for urban areas was about 0.45. The distribution of income has continued to worsen. For instance, in 1982 in the rural areas, the bottom 20% of the population received 4.9 per cent of the income while the top 20 per cent received 56.9 per cent. By 1992, the distribution was 3.5 per cent and 60.2 per cent respectively. The poorest 20 per cent were even worse off in the urban areas in 1992, where the lowest 20 per cent received 2.9 per cent and top 20 per cent received 58.8 per cent, (Biodiversity Conservation and Information Network; 2005).
Even in view of the above, the emerging picture of Africa in the MDG report portrays a continent that has secured progress in key areas such as net primary enrolment, gender parity in primary education, political empowerment of women, access to safe drinking water, and stemming the spread of HIV/AIDS. Antiretroviral treatment is becoming available in a large number of countries and maternal mortality rates are falling in some places.
The report draws attention to policy innovations in Africa that are facilitating progress toward attainment of the MDGs. These innovations include new and expanded social protection programs, which were once thought to be unaffordable to most poor countries but are now embraced as important additional interventions to secure progress on key human development indicators. In addition, countries have used the MDGs as a framework for development planning, strengthening coordination and cascading the MDGs to lower tiers of government (UNDP 2000,
Africa’s economies performed reasonably well in the 1960s and early 1970s but did poorly in the following two decades. However, since the late1990s, the economy has picked up. But the recovery’s sustainability is fragile for two reasons. First, strong domestic savings do not underpin it. Second, Africa’s economies remain vulnerable to outside shocks (ECA 2001a). Economic growth for 1990-2000 averaged only 2.1 per cent a year, less than population growth of 2.8 per cent. However, African economies have continued to sustain the growth momentum of the early 2000s and recorded an overall average real GDP growth rate of 5.4 percent (ECA, 2007). This can be attributed to substantial progress in macroeconomic stabilization, deregulation, privatization, trade, and exchange rates reforms. However, structural constraints and institutional weaknesses continue to inhibit a vigorous supply response, as most economies still depend on primary products, exhibiting a high export concentration. While 60 per cent of all exports from Africa are agricultural (66 per cent of which is unprocessed); they account for only 8 per cent of the countries’ GDP (Osuntogun; 2005).
Africa and foreign aid
Africa’s dependence on foreign aid is not helping the situation. The so called aid does not only breed a culture of dependence on others by the continent. The aid also comes with strings attached, of which all seek to burden the continent with high interests that will take the people of the borrowing African states decades to repay.
Foreign Direct Investment (FDI)
Average annual inflows of foreign direct investment (FDI) into Africa doubled in the 1980s compared with the 1970s. It also increased significantly in the 1990s and in the period 2000–2003. Comparisons with global flows and those of other regions may be more useful, however. In the mid 1970s, Africa’s share of global FDI was about 6 percent, a level that fell to the current 2–3 percent. Among developing countries, Africa’s share of FDI in 1976 was about 28 percent; it is now less than 9 percent Also in comparison with all other developing regions, Africa has remained aid dependent, with FDI lagging behind official development assistance (ODA). Between 1970 and 2003, FDI accounted for just one fifth of all capital flows to Africa. It is well known that FDI is one of the most dynamic international resource flows to developing countries.
FDI is particularly important because it is a package of tangible and intangible assets and because firms deploying them are important players in the global economy. There is considerable evidence that FDI can affect growth and development by complementing domestic investment and by facilitating trade and transfer of knowledge and technology.
Regional trade among African states
Over the period from 2007 to 2011, the average share of Intra-African exports in total merchandise exports in Africa was 11 per cent compared with 50 per cent in developing Asia, 21 per cent in Latin America and the Caribbean and 70 per cent in Europe. Furthermore, available evidence indicates that the continent’s actual level of trade is also below potential, given its level of development and factor endowments.
There are several reasons for the weak regional trade performance in Africa, one of which is that the approach to regional integration on the continent has so far focused more on the elimination of trade barriers and less on the development of the productive capacities necessary for trade. While the elimination of trade barriers is certainly important, it will not have the desired effect if it is not complemented with policy measures to boost supply capacities.
Africa’s development future
Though the continent has had numerous challenges as highlighted above, the continent seems to be geared towards having a brighter future. This era of sustainable development has been championed by undertakings such as the African Summit held in Lusaka, Zambia, 2001 which adopted the New Partnership for Africa’s Development (NEPAD) that makes peace, security, democracy, good economic and corporate governance preconditions for sustainable development on the continent. NEPAD is governed by the following priorities:
- Establishing the conditions for sustainable development by ensuring:
- Peace and security;
- Democracy and good, political, economic and corporate governance;
- Regional co-operation and integration;
- Capacity building.
- Policy reforms and increased investment in the following priority sectors-
- Human development with a focus on health, education, science and technology and skills development;
- Building and improving infrastructure, including Information and Communication Technology (ICT),
- Energy, Transport, Water and Sanitation;
- Promoting diversification of production and exports, particularly with respect to agro-industries, manufacturing, mining, mineral beneficiation and tourism;
- Accelerating intra-African trade and improving access to markets of developed countries; and
- The environment.
- Mobilizing resources by –
- Increasing domestic savings and investments;
- Improving management of public revenue and expenditure;
- Improving Africa’s share in global trade;
- Attracting foreign direct investment; and
- Increasing capital flows through further debt reduction and increase capital flows (NEPAD: 2014)
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About the author
Janes Ouma Odongo is a Masters of Arts in Disaster Management Student at The University of Nairobi. He is a Graduate Assistant in one of the Public Universities in Kenya